Several studies have linked stress with Alzheimer's disease (AD) vulnerability; however, the mechanism remains to be fully elucidated. In the current paper, we investigated the role of glucocortitcoids on the AD-like phenotype. We administered the glucocorticoid dexamethasone to Tg2576 mice for 4 weeks and then investigated its effect on memory, amyloid-beta and tau levels, and metabolism. At the end of the treatment period, we observed that mice receiving dexamethasone had a significant impairment in the fear conditioning paradigm compared with controls. Dexamethasone-treated animals showed a significant increase in the amount of brain soluble A beta(40) levels, but no alteration in the steady state levels of its precursor protein, A beta PP, or in the major protease enzymes involved in its metabolism (i.e., ADAM-10, BACE-1, or gamma-secretase complex). While total tau protein levels were unaltered between the two groups, we found that dexamethasone significantly reduced tau phosphorylation at specific sites that were mediated by decreases in glycogen synthase kinase-3 beta protein level and activity. Finally, we observed a direct correlation between memory impairments and tau phosphorylation levels. Our study highlights the significant role that glucocorticoids play in exacerbating AD-like cognitive impairments via alteration of tau protein phosphorylation state.